Semantix, a language service provider based in Sweden has acquired a local boutique rival LSP Teknotrans. The Swedish has been on a drive to acquire smaller local rivals having presence in non-Nordic countries. With the Teknotrans acquisition, Semantix will gain presence in Croatia along with expansion of domestic translation business.
The deal is expected to be closed on April 1, 2019 and the terms of the deal have not been disclosed.
Founded in 1971 by CEO Christian Hammer, Teknotrans has focused on industrial and automotive verticals and generated US$3.27 million in 2018, 10% up from the previous year. The regulatory filings of the company reveals that the profit was around US$ 290,000 in 2016 which increased to US$ 350,000 in 2017. The company has expanded from its base in Sweden to operating offices in Croatia.
The officials from Semantix including the CEO Patrik Attemark approached directly to Teknotrans for discussing a possible deal. The language services industry is finding it increasingly difficult to achieve and sustain an organic growth especially smaller players like Teknotrans. In contrast to Teknotrans, Semantix is the largest LSP in the Nordic region with US$ 110 million in 2018 revenues. The company has around 400 full time employees in its staff.
The Swedish LSP has been on an acquisition drive in the Nordic region thanks to backing from private equity firm Segulah V L.P., its largest shareholder. The company acquired TextMinded in 2017, Amesto Translations in 2018 and Tolkvox in 2019. The Amesto revenues contributed to 13% of Semantix’s growth in 2018 by contributing US$ 18 million to top line.
Along with a majority of footprint in the Nordics, the company also operates in other European markets along with Chile and China. The Teknotrans acquisition deal benefits Semantix by strengthening its global presence though the company strategic focus will remain in the Nordic region only.
Teknotrans will be made part of the Semantix brand but the timing has not been decided yet. Semantix CEO said that the management team of Teknotrans will not continue in their current form and soon they will be integrated in the new management structure of Semantix.
The public sector interpreting business with its vulnerability to troughs and peaks in demand depending on the volatility in immigration trends and policies has been roots of Semantix’s business traditionally. Now the translation service business for both private and public sectors have become strategically important for the company.
The company currently uses Memsource as a TMS and XTRF as a production tool and also other language technology applications. The acquisition of Tolkvox, a remote interpreting startup, reinforced the company’s commitment to developing and employing language technology for both text and voice.
The CEO describes that Semantix is increasingly deploying Neural Machine Translation (NMT). He said that we are deploying automation in all parts of workflow where there is possibility of improving efficiency and quality. There is unquestionable impact of NMT on the company.
NMT is being perceived by the company as a transformative technology which will lead to a cultural shift where cross-cultural collaboration, open innovation and digital leadership will be the key. Attemark is not at all concerned about the advance of tech giants such as Amazon and Google who have launched their own commercial customizable NMT solutions. He views them as valuable tools to enhance the capabilities of its own language technology toolkit.
Nandini Roy Choudhury is a thought leader and subject matter expert on a range of industries, notably retail & consumer goods. Her analytical skills and lucid qualitative analysis have made her an authoritative figure on this domain.